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CA Intermediate · Corporate and Other Laws · The Limited Liability Partnership Act, 2008

Dev and Esha plan to form an LLP in Jaipur. Which statement about the legal nature of the LLP once incorporated is correct?

An LLP is a body corporate with a legal personality separate from its partners, and it has perpetual succession. It exists from incorporation, not from filing returns, and the death or retirement of a partner does not end its existence.

  1. AIt is a body corporate and a legal entity separate from its partners, with perpetual successionCorrect
  2. BIt is not a separate legal entity and its partners carry on business as co-owners
  3. CIt is a separate legal entity only after its first annual return is filed
  4. DIt ceases to exist whenever any partner dies or retires

Explanation

On incorporation an LLP is a body corporate with a legal personality separate from its partners, and has perpetual succession. A change in partners does not affect its existence, rights or liabilities, so the options suggesting otherwise are wrong.

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